Council Houses

– in Westminster Hall at 12:00 am on 11th June 2003.

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Motion made, and Question proposed, That the sitting be now adjourned.—[Gillian Merron.]

Photo of Bob Russell Bob Russell Liberal Democrat, Colchester 9:30 am, 11th June 2003

When social historians write the history of the 20th century, they will contrast the huge advances made in the living standards of the British people between 1900 and 1999. Even allowing for two bloody world wars and the years of economic depression, by the end of the century the quality of life had improved dramatically for the mass of the population, beyond the wildest dreams of those doughty pioneers of social change who sowed the seeds in Victorian Britain for better health, higher standards of education, longer life expectancy, improved working conditions, wider opportunities and vastly superior housing conditions for most people.

While the improvements in the overall quality of life spanned the 100 years, for millions of people it was in the middle 50 years or so of the 20th century—the second and third quarters—when the greatest advances were made in housing. Council housing did it—not the private sector, not quango housing associations or arm's-length management operations, but the democratically accountable local authority council housing departments that were funded by central Government. In those days, one-nation Conservative Governments who championed municipal enterprise and civic pride would compete with real Labour Governments for who was the best when it came to building council houses for the general population.

As a consequence, by the time that the final quarter of the 20th century arrived, the concept of homelessness was in effect a thing of the past. Cardboard city was unheard of. Not only had the curse of homelessness been tackled and beaten, but the relatively few families at any one time living in sub-standard accommodation or in housing that was inadequate for their needs were certain that it would be only a few months in most cases before the promise of a family home would become a reality—oh, happy days.

Where has it all gone wrong? We are told that this country has the world's fourth richest economy, but why does Britain now have a housing crisis the like of which I have not witnessed before in my more than 30 years of elected public office? It is most certainly not the fault of the councils. I pay tribute to the excellent work of local authority housing staff in difficult, challenging and, in some respects, hopeless circumstances in trying to help the homeless and families living in substandard accommodation to be better housed. The front-line staff deserve praise for trying to achieve the near impossible. I pay particular tribute to the housing staff at Colchester borough council who assist the homeless and who recently achieved beacon status for the council—staff who help the victims of the Government's failed housing policies.

Until the Thatcher years, families in need of decent housing would have been housed, but not now. What Thatcher started, the Major and Blair Governments have continued. Indeed, it could be argued that new Labour is more hostile to the concept of council housing than even the measures put forward during 18 years of right-wing Tory Governments.

Photo of Bob Spink Bob Spink Conservative, Castle Point

I cannot agree with the hon. Gentleman. In the past five years, precisely 100 large-scale voluntary transfers have taken place to move council housing stock into a position where housing can be replaced and new investment can be brought in. Surely that provides better housing in a more sustainable way, so that that stock can be replaced.

Photo of Bob Russell Bob Russell Liberal Democrat, Colchester

I hear what the hon. Gentleman says, but if he checks with the House of Commons Library, he may find that the statistics do not bear out his argument.

Photo of Mr John McWilliam Mr John McWilliam Labour, Blaydon

Order. It is a rule in the House that, if hon. Members refer to other hon. Members, they refer to them either by their constituencies or by their title. It is also the practice in the House that if an hon. Member refers to members of the upper House, he refers to them by their title.

Photo of Bob Russell Bob Russell Liberal Democrat, Colchester

Thank you, Mr. Deputy Speaker.

I do not criticise the principle of people buying their council home. Indeed, it was my refusal to oppose council house sales that the Labour party in Colchester used against me and which played a part in forcing me out of the party in 1981. Now Labour is more enthused about getting rid of council houses than the Conservatives ever were. It is a funny old world.

According to the House of Commons Library to which I am grateful for statistical information, in the final five years of the Conservative Government, 190,418 council dwellings were sold. In the first five years of this Labour Government, sales totalled 240,200.

While I am not opposed to the principle of the right to buy, the mass disposal of public assets at hugely discounted prices was not something that had any economic justification. That Thatcherite policy failed because of the Government's refusal to allow councils to reinvest the money from those sales in building new homes. Had that happened, we would not have a nationwide housing crisis today.

In Colchester, more than 3,250 council homes have been sold since the right to buy was introduced. That represents about 30 per cent. of the original stock, but a high proportion of the sales have been family houses, and houses—not flats, or dwellings for the elderly—are in desperately short supply for homeless families. One person has managed to acquire a dozen houses, which he rents out for more than a council rent. He has become a millionaire.

Photo of Mike Hancock Mike Hancock Liberal Democrat, Portsmouth South

I apologise for having to leave the debate to attend the Select Committee on Defence as I would have liked to have been here. Is there any statistical evidence to show why both Labour and Conservative Governments failed to deal with the problem of the replacement of the houses that were sold? Is there any evidence to suggest that, when housing stock is passed on to the private sector, it leads to an increase in the provision of houses within those authorities?

Photo of Bob Russell Bob Russell Liberal Democrat, Colchester

All the evidence suggests that the problem deteriorates. According to the statistics provided by the House of Commons Library, nothing shows that the sale proceeds are invested in new housing stock.

Photo of Tony McNulty Tony McNulty Parliamentary Under-Secretary, Office of the Deputy Prime Minister

The hon. Gentleman has just cited evidence that suggests that large-scale voluntary transfer deteriorates housing stock. Can he cite the evidence that he is using?

Photo of Bob Russell Bob Russell Liberal Democrat, Colchester

I will give the Minister the benefit of the doubt that he misunderstood what I said. I refer to the need to build new houses—to have additional houses—and I have not yet been provided with the evidence that that has been done. I would welcome the hon. Gentleman giving us the good news of the breakthroughs and progress made by the Government to solve the housing crisis in his reply.

Photo of Tony McNulty Tony McNulty Parliamentary Under-Secretary, Office of the Deputy Prime Minister

With respect to the hon. Gentleman, I suggest that he uses language more carefully. Mr. Hancock asked whether there was any evidence that stock transfer has improved stock. The answer was, "No, it has not. If anything, it has deteriorated." That is not an accurate assessment.

Photo of Bob Russell Bob Russell Liberal Democrat, Colchester

I refer to new dwellings. As I have no first-hand evidence of stock transfer leading to the improvement cited by the Minister, I have to throw open the question for consideration. Why cannot that investment be given to local authorities to improve their stock? Why does it have to take either a privatisation, a semi-privatised or a quango route? Why are the Government so hostile to local councils that they would not even trust them with the money to invest in and modernise council housing stock?

The present Government inherited a mess created by the two previous Conservative Governments, but they have not tackled the housing crisis. That would have been done under the real Labour Governments, such as the Attlee Administration in the years immediately after the war and those of Wilson and Callaghan in the 1960s and 1970s, while one-nation Conservative Governments such as those led by Macmillan and Heath would not have allowed it to happen in the first place. New Labour has allowed the situation to deteriorate to an appalling level at which homelessness is increasing all the time and families living in inadequate accommodation know that their chances of being offered somewhere better to live are becoming more remote.

The contrast between 1979 and today is stark. In 1979, more than 75,000 local authority dwellings were built. In 1999, just 171 were built throughout the country. In the 15 years after the second world war, more public sector than private sector housing was built. I am not arguing for a return to that split. However, if the Government want to be true to the principles and ideals of their party's founders, they should make it a policy to return to the days when the Government funded local authorities to build more council houses to meet the needs of their communities.

Photo of Mike Hancock Mike Hancock Liberal Democrat, Portsmouth South

I am sure that my hon. Friend and the whole House would be interested to know that in the city of Portsmouth the housing crisis today is worse than it was at the end of the second world war. More people are waiting for houses than there were in 1946, when the rebuilding programme really got under way. There is less opportunity for the sort of people who need council housing to get into a proper home of their own. Is not that an indictment of the Government's policies, which do not sensibly consider how local authorities can help?

Photo of Bob Russell Bob Russell Liberal Democrat, Colchester

My hon. Friend makes that point strongly and I am sure that it is recognised by his constituents.

If the Government are going to claim that housing associations and the private sector are making up the shortfall in council housing, I am bound to observe that figures from the House of Commons Library say the opposite. In 1979, in addition to 75,000 local authority dwellings, registered social landlords and housing associations built 17,835. By 1997, there were 27,502; but in 2001–02 that figure had fallen to 20,692, by which time virtually no local authority dwellings were being built. There were 140,481 private enterprise dwellings in 1979, 152,530 in 1997 and 141,125 in 2001–02. However one looks at it, whether in terms of councils, housing association or private enterprise, the figures for all sectors building new dwellings have fallen under new Labour. No wonder we have a housing crisis.

Housing associations would love to build more homes, but they rely on funds from the Housing Corporation, which in turn is funded by the Government. One aspect of housing association developments causes me considerable concern—what I call "Heineken housing", or building on sites that private developers do not want to reach. Land that the private sector knows would not be suitable for houses for sale is deemed okay for social housing tenants.

There must not be double standards, but there are. That is proved by three examples from my constituency. First, family houses were built on top of a 100-year-old slag heap of foundry waste. Secondly, planning permission was given just two weeks ago for social housing to be built on a greensward and car park behind a block of shops next to a mobile phone mast and under overhead electricity supply cables. Thirdly, there is a site for which the developer had failed for years to get permission because of planning objections, but all those mysteriously disappeared when a social housing element was included.

Double standards should not be permitted. I should like to see a return to the Parker Morris standards, which used to apply to council houses. However, if the Government are looking to housing associations to build houses for rent—by the way, what does the term affordable rent mean?— I am told that the bids to the Housing Corporation are three times greater than the available finance. Will someone please tell the Chancellor? In his euro speech on Monday, he said:

"Britain has experienced difficulty in balancing supply and demand in housing."—[Hansard, 9 June 2003; Vol. 406, c. 411.]

He promised that there would be an increase in the supply of new housing, but can anyone recall him mentioning the need to provide housing for rent? There is no room at Gordon's inn for the homeless.

Tomorrow, the Minister for Housing and Planning is due to give what is billed as a keynote address at the Millennium grandstand at Newmarket race course at the launch of the regional housing strategy for the east of England. Will that include building new council houses? If not, why not? The Chancellor said that there was a risk of a cycle of boom and bust in Britain's volatile housing market. We are told that he is considering massive increases in stamp duty and capital gains tax as a way of damping down any house price boom. He said specifically that

"further housing reforms will be put in place in the coming year . . . that will help to ensure that by having a reduced propensity to house price inflation, which is in everyone's interest, stability can be further entrenched."—[Hansard, 9 June 2003; Vol. 406, c. 411.]

How the homeless and those in inadequate housing may have reacted to the Chancellor's comments is something to ponder. Young mothers and children living in a hostel for the homeless in Colchester, which is "not fit for dogs" according to reports in the town's Essex County Standard and Evening Gazette last Friday, would welcome the Government funding new council houses. That would, at a stroke, reduce the demand for people being forced to buy and it would, as a consequence, have a stabilising effect on house prices. That would be a return to the balance that happily co-existed prior to 1979.

How many people are in a position to buy? A large percentage are not, according to a survey carried out by Professor Steve Wilcox at the university of York for the Joseph Rowntree Foundation. A report in the East Anglian Daily Times on 2 June said:

"People aged in their 20s and 30s and key workers such as nurses, teachers and police officers are among those finding it hardest to buy their first home."

Statistics showed that 35.5 per cent. of families in Suffolk with two working adults could not afford to buy a home. In Essex it is even worse, as 39.2 per cent. cannot reach the asking price of the cheaper properties. In Chelmsford, that figure rose to 52.3 per cent., while Colchester is slightly more fortunate at 37.1 per cent. In south Cambridgeshire, the figure is 57.3 per cent.

Aspirations of home ownership for those people cannot be fulfilled. The resumption of council house building would have the twin outcome of a supply of good quality houses for families to rent and less demand in the house buying market. There is another bonus—a boost for jobs in the building industry.

When I was leader of Colchester borough council, between 1987 and 1991, at a meeting of the Essex branch of the Association of District Councils, I told the then Member for South Colchester and Maldon—now Lord Wakeham—that a combination of large-scale sales of council houses and a failure to build replacement houses would result in thousands of people being forced into the property-owning market when they would not otherwise have done so, that the demand for lower priced houses would be greater than the availability, and that that would lead to an increase in house prices throughout the entire housing market. I suggested that that did not make economic sense and that it was not fair on those who would be deprived of a decent home in which to live. I have been proved right. Tragically, the problem is considerably worse than I ever thought it would be. For the homeless and those in accommodation that is less than ideal for their needs, there is no such thing as the dream of being part of the property-owning democracy, but rather the 24-hour nightmare of housing despair. Whether we are talking about big cities, towns or villages, all have residents suffering because of the lack of council homes. In rural areas, young people are being forced to leave the villages in which they were born, where their families may have lived for generations, because there is no housing for them, or which they can afford.

Two weeks ago, BBC television in the east of England, over two nights, reported on council housing. Its survey revealed that waiting lists are rising sharply across the region. Some local authorities reported numbers up by as much as 50 per cent. in a year. When reporters asked viewers for their stories, they were swamped with calls. A representative from BBC East told me last night:

"In Ipswich, a couple were told there was a 30-year waiting list for council houses. In Milton Keynes, a nine-week-old baby sleeps in a pram because there is no room for a cot in the house. And in Norwich, a family of five are living in a cramped one-bedroomed bungalow."

Those are just three examples of Labour's housing failure. Last year in Colchester, the council received 1,456 homelessness applications. However, only 426 were accepted. I am told that that figure is the highest in the region, but more than 1,000 applications were rejected. There are 2,354 applicant households on the housing register. The council's head of housing, Mr. Andrew Murray, tells me that Colchester needs 500 affordable homes a year. The number delivered last year was 40—further evidence of Labour's housing failure.

In this morning's debate, I am concentrating on the need to build new council houses, not other aspects such as stock transfers or creation of arm's-length management operations. However, I ask why the Labour Government are so hostile to local authorities? Why does Labour not trust local councils? Why will the Government not fund authorities to build, maintain and manage council houses, which was the case for the greater part of the 20th century, and which had a track record of delivery because homelessness was beaten? We need a regime change in Government thinking towards council houses—back to that which proved so successful over the larger part of the last century. Tried and tested ways are often better than new ones. Tinkering with the system, such as last month's launch of the consultation paper with the long-winded title "Improving standards of accommodation for homeless households placed in temporary accommodation by housing authorities — England" does not produce a single new house, and it is houses that the homeless want, not temporary accommodation, or bed and breakfast.

I suggest that better solutions come from Shelter, which is arguably the most knowledgeable organisation dealing with the national housing crisis. Its proposals in response to the Government's published strategy, "Sustainable communities: building for the future" are ones that I hope will be adopted. As Shelter so graphically put it in evidence given to me:

"Poor housing and homelessness has a negative impact on all aspects of a child's life. Temporary accommodation inevitably means frequent moves, forcing children to change schools and friendship circles. And due to damp, cramped conditions, badly housed children are also more susceptible to diseases."

Is the Prime Minister aware of the housing crisis? If his friends have not told him, I have. It was the subject of my last question to him, when I challenged him in the House:

"When will his Government do something to provide decent housing for homeless people, particularly for the underclass that has developed under new Labour?"—[Hansard, 4 December 2002; Vol. 395, c. 907.]

That was six months ago. Sadly, I see no evidence that new Labour is giving the housing crisis the attention that it deserves. In the past, real Labour would have made a priority of providing decent homes for homeless families.

I am not sure how the Minister will respond. Perhaps he will use the charm offensive, or perhaps he will not bother with the charm. I do not hold him responsible for the housing crisis. He is the person who has been landed with it. What he tells us—I am sure that we all have nice homes—is not important. It is the message that he gives to those without a decent home that is important. The best way to tackle the twin problems of rapidly rising house prices, which put buying a home beyond the reach of more and more young people, and the increasing number of homeless people and others who are housed inadequately is the restoration of the council house building programme that brought about such a huge advance in living standards for millions of people in the 20th century. There is a housing crisis, and it is worse now than it was in May 1997.

Photo of Mr Alan Hurst Mr Alan Hurst Labour, Braintree 9:50 am, 11th June 2003

I congratulate my near neighbour, Bob Russell, on having brought this matter before the House. I agree with the thrust of his argument, minus the invective, and I hope that some common ground can be found on how we might restore a decent housing situation.

Last Saturday, I went, as I do each year, to the Braintree and Bocking carnival. Not everybody is familiar with those twin towns, but in the Bocking part there is a 1950s council housing development. The carnival wends its way and eventually reaches a field called Meadowside. That is the central part of the development of sturdy, three-bedroom houses with adequate gardens that overlook the meadow. The development is on a hillside, and from many points one can still look out across open countryside. The verges to the roads are broad, ancient oaks have been preserved along them, and the whole effect is exactly the kind of housing that was envisaged in the 1940s, 1950s and 1960s.

In those times, the two main political parties competed avidly with each other over who built more council houses. My party said that it had built 1 million between 1945 and 1951, and the Conservatives promised to build more—and they did. The argument then turned on whether Labour's houses were better; they probably were. The debate over standards—more and better, better and more—went on until the 1970s. During that period, almost any working family could anticipate decent housing, through either rental in the council sector or the ability to buy with a mortgage from a building society or local authority.

The hon. Member for Colchester gave some figures. From memory, I believe that in 1953, 200,000 council houses were built—more than the total number of houses built in 2000. By 2000, only 20,000 units of what is now called, rather condescendingly, social housing—we should think of a better term—were built. At one time, Braintree district council had 14,000 council properties for a much smaller population. Now it has only 9,000 and falling.

We should also look at the cost ratio. What would it take a working family to buy a house? Some time ago, I was fortunate in securing an Adjournment debate, which the hon. Member for Colchester was good enough to support. Shortly before that, I met a man in my advice surgery who had bought a house in Witham, under the build for sale scheme run by Witham urban district council, when he was a recently-married factory worker earning £1,500 per annum. He bought a house for £4,250 with a 100 per cent. mortgage. His wife was not working at the time. The cost of the house was less than three times his sole salary. It was a three-bedroom house, with gardens at front and rear, and a garage. It is still there now; it is a delightful house, and I suspect that it will sell for £170,000 or £180,000, which is way beyond the reach of people in a similar position to his today.

The Rowntree study that the hon. Gentleman mentioned makes fairly complicated arithmetic equations, but I shall try to break the matter down in my simple mind and compare the position now to the situation I described in Witham in 1968. I believe that a police officer's salary is about £23,000 a year. The cost of even a modest house now is six times that salary. It is also six times a teacher's salary; for a nurse, it is more than seven times. In many ways, those people are rather higher up the scale than the factory worker that I mentioned earlier. Those people are in a far worse position than they would have been 35 years ago.

Is there an answer? The hon. Member for Colchester wishes to return to a mass council house building programme. I see the merit in that, but of course there is the question of the right to buy. The issue reminds me a little of the recitation of "Albert and the Lion" by Stanley Holloway. I cannot remember the exact words, and other Members may have better accents for quoting from it than I do, but the point of it was, why go on producing children to feed them to lions? We want more houses, but we want them to be contained as far as possible in a situation that repeats itself for further generations.

There will always be a case for the rented market, but I want to think again about the build for sale scheme. Usually, with such schemes, no one has to worry about the right to buy problem because there is no right to buy, as the houses have already been bought. Build for sale operates on the basis that local authorities build houses on land that they acquire. They then sell the house to an approved purchaser, who is a member of a family in need, and they grant a 100 per cent. mortgage. That mortgage should be constructed so that the repayment is similar to an affordable rent. When the family move on, they sell the property and keep the profit, as they would in the private housing market, and the mortgage goes back to the council to be recycled on another property.

Such a scheme certainly needs a large infusion of Government money to pump-prime it and boost it in the first instance, but once it is moving along, it will start to provide affordable housing, owned by the people, in repeating patterns over a wide area of this country.

Photo of Bob Spink Bob Spink Conservative, Castle Point

This is the right debate to have today. I congratulate the hon. Gentleman on his positive approach. I apologise for having to leave for a 10 o'clock meeting, but I encourage him to continue along the lines that he is taking. He should continue to consider the problem seriously, and should put the dogma of who owns the housing behind him and concentrate on three issues: providing more houses for those who need them; the replacement of houses once people have bought them; and the quality of the environment in which those houses exist. Those are the issues that really cause our constituents concern.

Photo of Mr Alan Hurst Mr Alan Hurst Labour, Braintree

I am grateful for that intervention, but I shall not be seduced into going down an entirely free-market path. It has been shown in the past 20 years that that approach has failed to solve the problem; indeed, it has exacerbated it. We need some state intervention, as I hope I have suggested in my remarks. The councils should build and lend, and the Government should pump-prime the system to start the financial process. Only with that sort of grip or control will it be possible to build enough houses of the style and kind required for working people.

One is always tempted to think of the past as a golden age. I certainly thought that on Saturday when I was at the Braintree and Bocking carnival; when I saw the houses there, I thought what a shame it is that the chances of young people being able to afford houses of that kind are now almost nil. The past was not always as golden as we remember, but sometimes we had the vision to see a problem and ask what we could do about it. I believe that a dynamic state still has a strong role to play by intervening for the good and betterment of those who are less well off.

Following on from the question of whether it is dogma, I recollect reading a book as a student—I believe it was written by the father of Mr. Hogg—which said that the Conservatives have never been afraid of using strong government. I invite Conservative Members to spend some time reflecting on their party's history, and the fact that within the past 50 years it was prepared to build houses for working people of a type and on a scale that were fit for the purpose.

I urge my own party to recall the words of Hugh Dalton, "Call Back Yesterday"—we should ask what we can do to recreate a society, with genuine hope of a decent life and a decent house, for those who are now denied that opportunity.

Photo of David Drew David Drew Labour/Co-operative, Stroud 10:01 am, 11th June 2003

I am pleased to follow my hon. Friend Mr. Hurst. I congratulate my friend, Bob Russell; we shared many times together. Like my hon. Friend, I shall not go with the invective but with the message, which was powerful.

Today's debate is the third in recent times on council housing. The first was opened by my hon. Friend Mr. Mitchell, who spoke at length about the problems of cross-subsidisation caused by the housing benefit regulations, which effectively meant that some council tenants were paying for others, which caused much angst.

More recently, the debate that was led by my hon. Friend Mr. Coleman was answered by the Minister who is to respond to this debate. That was interesting because, although I would not draw many parallels between the Hammersmith and Fulham area and my authority of Stroud, both have tried to be proactive in their approach to their housing stock.

I make no apology for wanting to talk about some of the local implications, because my authority is pursuing the large-scale voluntary transfer scheme. My party is not in charge of the district council, which I think is wrong to go down that route, but it has done it for honourable reasons. I want to look at some of the implications, but I first pay tribute to a group who, through voluntary empowerment, have done an awful lot to question some of the national trends by defending council housing. That grass-roots group has become a national organisation because of the current scale of transfers.

I was directly involved in evaluating the future of housing stock as a councillor in the late 1980s. Stroud district council was looking to the future and it offered tenants what I thought was a fair and objective opportunity. It wanted to know if people saw merit in some form of transfer. Because it was done in a fair, equitable and open manner, the tenants' response was overwhelming: they wanted to stay with their existing landlord. From all the messages that I receive, I understand that that is still what they want to do. Unfortunately, that is not being offered to them. Stroud's application is going through a process, and we have made a start. The document is glossy and comprehensive and the officers of Stroud have done well in preparing it.

Stroud already has a good housing authority. We have been at the forefront of trying to work within the local authority framework for housing, and have performed that role as well as possible. In all the evidence—and this is acknowledged in the work of the district auditor—Stroud is in the top half of south-west authorities; it is probably near the top. South-west authorities seem not to have some of the problems found elsewhere in the country.

The authority deserves congratulations on two counts. First, it has kept rents at realistic levels. There was the odd argument in certain years in the 1990s when rents rose, but in the main rents have been affordable. Secondly, and more importantly, locally we are proud of our reinvestment programme for housing stock. It is easy to generalise, and I always tread gently in this area, but I cannot recall going into people's houses in my area and feeling in any way ashamed by the quality of council housing. Houses next door, which have often been bought, reveal the stark difference between the way in which council houses are maintained as part of the housing stock, and the way in which bought houses are maintained by their owners, who are understandably struggling because of the money that they have paid, even with a discount, to buy their house.

My argument is that we should consider the options that face the council. I am critical of the housing terrain through which we are walking. There are two fundamental questions about how housing in this country is currently performing. There is the macro question of where the funding stream sits in relation to wider economic policies. There are those who say that there will always be higher priorities—for example, education, health and social services—because many people can afford their own houses.

I think that early on the Government made a mistake. There were strong arguments for considering alternatives to the public sector borrowing requirement in terms of the general Government financial deficit, and taking housing out of the equation would have given us greater flexibility. Part of the problem is that there are macro constraints that relate to private sector housing. The Chancellor's statement was interesting, because regardless of whether people think that the euro is a good or bad thing—some Labour Members do not think that it is a good thing—it showed that so much of the debate is tied up with housing. That was fascinating. On the back of that are clear implications for the public sector, such as for housing associations—I term that as part of the public sector, although some people prefer to call it the voluntary sector—and the true public sector: local authorities. That sector is constrained by macro-economic policies.

The Government are absolutely right to address the fact that too much of the stock, in particular in urban Britain, is substandard. That must be brought up to 21st-century standards. Why should people who pay good rents and live in places in which they have chosen to live have to suffer because they happen to live in an authority that does not have the money to bring stock up to date? The Government are right to address that as a fundamental issue. The problem in doing that is that they are either ignoring what is going on outside or making things much more difficult.

My problem with the process is that we are being driven towards large-scale voluntary transfer. I have talked to councillors from across the political divide who perceive that they are being driven towards LSVT. I admit that there is a slight difference of opinion between us in that I think they have more choice than they sometimes pretend. None the less, I think that we have reached the wrong conclusion, because we have not given people what I want them to have: real choice. Of course, one could parade the different opportunities that exist, such as an arm's-length management organisation or, possibly, the private finance initiative. However, the cards seem to be stacked very much in favour of LSVT.

Photo of Bob Russell Bob Russell Liberal Democrat, Colchester

Does the hon. Gentleman accept that the question of who manages or owns the houses will be almost academic if there are not enough houses for those in housing need? Given that no one has come forward to fill the gap, does he agree that the necessary houses can be built only by local councils funded by central Government, as used to happen all those years ago?

Photo of David Drew David Drew Labour/Co-operative, Stroud

Yes, I very much agree. The crux of the problem is the asset value of the stock, and one difficulty with the whole basis of LSVT is that we devalue the stock so that someone will buy it. That has an enormous impact on what happens in the future. If we put a realistic value on the stock, however, we could use creative measures—I will not say creative accounting, although we are talking to an extent about creatively using the asset value of the stock—to come up with the means to replenish the stock that we have sold.

Stroud is left with 5,500 units. I have never opposed the right to buy in principle, although I have always opposed it for the reasons suggested by the hon. Member for Colchester. I have always believed that we should have replenished the stock for every house that we sold. It is absolutely crazy that we did not do that. We should have built more houses, because it is a matter of giving people choice.

In the remaining minutes, I shall concentrate on the problems with the conclusion that we are being forced to adopt, which runs very much against tenants' better judgment. More than anything, however, I shall concentrate on the problems with the process under which we must adopt that conclusion. Although the procedure is notionally democratic, it is incredibly expensive, and Stroud will probably spend upwards of £500,000. For £500,000, we could do something to alleviate our problems with the affordability index. In that respect, Stroud is much like Braintree.

Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Shadow Spokesperson (Communities and Local Government)

I am sorry that the hon. Gentleman is so hostile to large-scale voluntary transfer, because it addresses many of the issues that want addressing, such as the discounted value of the houses and the flexibility of management. Cotswold district council is next door to the hon. Gentleman's area. Five years ago, it carried out the large-scale voluntary transfer of 500 houses. With the interest on the proceeds, it has been able to build a further 450 houses. Should not the tenants and Stroud district council, which we both represent, be looking at that sort of model?

Photo of David Drew David Drew Labour/Co-operative, Stroud

I do not want to take issue at great length with the hon. Gentleman, who is my neighbour. I have a slightly different perspective on Fosse Way, although it is a model housing association in many respects and has done some interesting things. It has recently faced the same problems as local authorities in that it has not had the necessary land and has not built a sufficient number of houses of late. It has inevitably put rents up, and the tenants to whom I talked were not as happy as the hon. Gentleman would contend. That may be because many decisions are outside their control. In that respect, I worry that as things become more difficult in the housing sector—I do not say that that is inevitable—someone else may take over Fosse Way and run it on the basis of economies of scale. If that happens, local accountability will be divorced from the management of the stock. The loss of local autonomy is a real worry, but people sometimes skate over the issue. We are looking not at now, but at five or 10 years down the road. I accept what he says, but I do not necessarily agree.

Tenants are being forced to face up to the process of seeking LSVT, and that is unfair. A working party report by Beha Williams Norman Ltd., a reputable housing consultancy, looked at the different options. I read it, and it was very clear what it was going to tell us: I do not know whether that was the brief that it was given or whether it came to that genuinely. However, it is interesting that it came up with only the one option.

I turn to the difficulties with the processes. For a start, we are talking about an 18-month period. For tenants to engage over 18 months demands a big commitment: I am not belittling them or being pejorative, but it is difficult to get tenants involved in that, because the vote will be later this year or early next year, and it has already been going on for a long period.

Costs have already been touched on. On the complications, for those who oppose the transfer, we will try to make it fairly simple for them to say that they wish to stay with the existing landlord. However, all of this is progressing in the context of quite a complicated argument over stock value, what benefits there will be in terms of new build, and the ways in which the stock might be further improved.

Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Shadow Spokesperson (Communities and Local Government)

Does the hon. Gentleman accept that at the end of that process, when the tenants have had all the information and are able to digest it, they ultimately have a veto because they can vote against the proposal? Therefore, at the end of the day, it is their decision.

Photo of David Drew David Drew Labour/Co-operative, Stroud

It is, but the balance is heavily weighted in favour of taking the decision, because the alternatives are not being fairly presented. I am disappointed at the amount of money that is being spent on one side. In another guise, the hon. Gentleman may be talking about the euro referendum, and I am quite sympathetic about that: one of the arguments on fairness is about where the money is being spent in relation to the ability to influence the debate.

I have worked with these people over decades, and I am not saying in any way that they are dishonourable, but I have worries. I have heard evidence about the independent tenant adviser who has been appointed, and it seems that tenants are more or less being told, "Well, this is going to happen, so how can we make it happen for the best?" That is wrong: it is leading the tenants to believe that they have to vote in a certain way. The process will involve every tenant being visited, but they will be visited by council officials and are those officials going to say, "On the one hand there is this set of arguments and on the other hand there is another?" I would love to hear that that is going to happen.

Until recently, it has been difficult for those who are opposed to the process even to get hold of the names and addresses of the tenants, because of provisions such as the Data Protection Act 1998. That is understandable, but in order to engage and have a debate one has to have equal and balanced access to the people who are going to make the decision. That has been quite a stumbling block in Stroud, and I do not believe that Stroud is unique in that.

We have just set up the shadow boards. That is happening, but the way in which it is being taken forward is not easy. For tenants to engage on those boards, they need a lot of empowerment. With regard to the district auditor, Bath and North East Somerset council, for example, has looked at some of the issues about how the consultation has been run, and that debate will grow.

There are councils that are voting no—Birmingham is the biggest one so far, and Nuneaton is another that is always cited. What happens when a council votes no to what is being proposed is interesting. At the least, there is a difficult period. I want the Minister to assure me that such councils will not be in any way further penalised. The argument that has largely been advanced in the case of Stroud is that we have to go down the proposed route owing to the decline in subsidies through the housing revenue account support. I do not want that to be made in any way worse, because council tenants have come to a different conclusion from their council and perhaps even from the Government. I want there to be a future under local authorities. There may be a different way to proceed, and if the option were really available, I would even find it acceptable for those tenants to go down a different route. I have looked carefully at the community ownership route, which is the idea that as a co-operator one can consider conversion into a housing co-operative. That has many attractions, but it often gets lost through LSVT pressure to opt out and go down a certain route.

In conclusion, I leave the my hon. Friend the Minister with the point that none of us really knows what will happen in the future as we increase the housing association stock at the cost of the local authority stock. That will have macro implications, but we need some assurances that the result will not be takeovers by massive new housing associations on the basis of economies of scale. I should also like greater guarantees about rents and an assurance that the bargain that has been proposed will be kept to in terms of the number and type of houses that should be built. There are an awful lot of questions. I am—

Photo of Mr John McWilliam Mr John McWilliam Labour, Blaydon

Order. I remind the hon. Gentleman that the purpose of these sittings is for the Member who secures the debate to get a reply from the Minister. If the hon. Gentleman continues much longer, the Member who secured the debate will not get an adequate reply.

Photo of David Drew David Drew Labour/Co-operative, Stroud

I shall conclude on that point. If the answers to my questions are forthcoming, I can go back to the tenants in Stroud district council and talk to them in a way that will assure them that the process that they have been asked to undertake is fair and honest, and that it will yield the right results, rather than the wrong ones.

Photo of Mr Matthew Green Mr Matthew Green Liberal Democrat, Ludlow 10:22 am, 11th June 2003

I congratulate my hon. Friend Bob Russell on securing this debate on such an important issue. We have heard some good contributions from the hon. Members for Braintree (Mr. Hurst) and for Stroud (Mr. Drew), although the last contribution was very long.

Those who have spoken have done well to identify some of the problems associated with the shortage of housing. To put a figure on the problem, Shelter says that 85,000 homeless families are now in temporary accommodation, which is the highest figure ever in the United Kingdom. However, that is not really surprising because since 1999 the amount of social housing built—either the tiny amount that councils build or that built through registered social landlords—has been lower than sales through right to buy. Since 1999, there has therefore been a year-on-year decline in the amount of social housing stock.

There are problems not only in London and the south-east but in rural areas such as Cornwall and Shropshire, where there is a lack of affordable housing for key workers. That is also symptomatic of the lack of social housing—there is neither social housing for people to move into nor houses to buy that they might be able to afford. The most dramatic effect has been in London and the south-east, but there is also a problem in rural areas, where people retire or buy holiday homes, thereby pricing local families out of the housing market. Many young people and families are forced to move out of the areas in which they grew up as a result of the shortage in social housing.

To consider some figures, the right to buy council houses has accelerated—in the last three years right-to-buy sales have been in excess of 50,000 a year, which is as high as the figure has been for a decade. That is leading to a decline in social housing stock that not even building by social landlords is replacing. Large-scale voluntary transfers, which seem to work in some circumstances, but have not been so successful in others, have also accelerated since 1997. There have been larger transfers since then than there were under the Conservative Government that introduced LSVT.

A problem with the right to buy is that it is the more desirable homes that have been bought. When the scheme was introduced, one of its good intentions was to break up the monolithic council housing estates, which were in decline because they did not enjoy mixed ownership. The feeling was that if people owned their own homes that would lead to regeneration. The reality is that the homes that have been bought are in the more desirable, particularly rural, areas. The four or five homes in a village have been snapped up, whereas the big estates have barely been touched. In that sense, right to buy has failed. There is also a decline in the number of houses built by councils. In 1992, councils built 2,500 homes—a tiny number. That dropped to 105 last year and the figure is declining year on year.

Even if we consider registered social landlords—in many ways, the Government's preferred option—we still find a year-on-year decline in the number of houses built, from 51,000 in 1996 to 29,800 last year. That is no surprise because the amount of money going into the housing corporations is lower than it was in 1992. Then it was £1.8 million, now it is half of that.

Photo of Mr Matthew Green Mr Matthew Green Liberal Democrat, Ludlow

Yes, £1.8 billion. I appreciate the Minister's correction. It is now just £900 million. There has been a slight rise in recent years, but the big drop was just after the 1997 election. The Chancellor's sticking to Tory spending plans probably did more to reduce social housing build than anything else in recent years.

That is the problem. How do we deal with it? There should not be a one-approach-fits-all response. Hon. Members have been right to say that councils feel that they are pushed down certain routes and that they should have more freedom. They should be able, if they choose, to build homes themselves, using whatever funds they have. That is extremely difficult for them to do under present arrangements. I would appreciate it if the Minister sounded sympathetic to that.

We should not return to building monolithic, large-scale housing estates but should aim for mixed use. Most councils understand that and would build mixed developments. I do not think that they would build 700 council houses in one development; we shall not go back to those days. The removal of the local authority social housing grant has denied us one of the routes through which extra social housing was built. South Shropshire, in my constituency, did LSVT in the early 1990s, and put all the money into local authority social housing grant, which led to an increase in social housing available in the constituency. That route has been removed. In the absence of local authority social housing grant, councils have to go cap in hand to housing corporations to ask for money instead of being able to use their own money. That does not help in the short and medium term.

The Government have introduced some welcome changes to the right to buy, but they have not gone far enough. They need to make the changes available to all councils that want them. In Cornwall and Shropshire, councils, and housing associations, because of the preserved right that transfers to them, suffer a continuing decline in their council housing stocks through right to buy. They would very much like those powers to be extended to them, not restricted to a ring of councils in London and the south-east. There are problems elsewhere. Why not let the councils themselves decide whether they want changes to the right-to-buy discount. That is the correct approach—trust the councils.

Another area that needs to be examined is something that the Conservatives introduced in the early 1980s and then dropped, partly because they had introduced the right to buy. I refer to the right to invest. One of the safest ways of keeping housing stock in councils' or registered social landlords' hands is to give people the right to invest by buying a proportion of the equity. They would then have a mortgage—and a means to build up funds—rather than having to buy the house outright. That approach keeps the property in the affordable housing sector and keeps it in the hands of registered social landlords, but allows individuals to build up capital for themselves, and perhaps eventually get into the conventional housing market. The right to invest needs to be examined and encouraged, particularly if we are—rightly—reducing the use of the right to buy.

We must also examine whether we can use section 106 agreements, as is the case in many parts of the country—not least in south Shropshire—to create a middle tier of affordable housing. That would, artificially, keep prices down on a local needs basis, rather in the way the old agricultural workers dwelling scheme worked, but extended to other areas. Some councils are looking at that and it seems to be a way forward.

I wish to press the Minister on a point that was raised by my hon. Friend the Member for Colchester. Why not trust the councils? Let us give them the power to decide the appropriate route in their area. One of the great failures of the Conservative Government was to take powers away from councils. They forced them down particular routes, and although this Government have made some modest steps in returning power to local authorities, they are just that—modest. Trust the councils; give them the powers to build new council houses, to recycle capital funds through schemes such as the local authority social housing grant, and to help registered social landlords. Give them the power to decide whether they need to make changes to the right to buy. Introduce the right to invest. I hope that the Minister will deal with some of those issues. Once again, I congratulate my hon. Friend the Member for Colchester on securing this important debate.

Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Shadow Spokesperson (Communities and Local Government) 10:32 am, 11th June 2003

I, too, congratulate Bob Russell on securing this important debate. How we deal with the present stock of 3.1 million public sector houses is of critical importance to a large percentage of the population. I congratulate the hon. Members for Braintree (Mr. Hurst), for Stroud (Mr. Drew), and for Ludlow (Matthew Green) on their speeches. The mnemonic that the hon. Member for Braintree used—a decent life and a decent home for those who are denied that opportunity—is a very good aspiration that we should all support.

The Prime Minister aspired to a decent standard of housing for all. He said that that would be achieved by the next election; I now see that the public service agreement target is 2010. Nevertheless, even to meet that target, the Government will have to go some way because for six years they have done little to tackle the problem. If one wants subsidised housing, one has to subsidise it. The resources that the Government are putting into subsidised housing are only now matching in real terms what we were putting in when we left office in 1997. I am pleased that the Government are now beginning to repent, but a real problem remains.

The hon. Member for Colchester was kind enough to provide figures for the building of council houses in 1979—a total of 92,000 houses. In 2001–02, only 240 council houses were built throughout the country. To a small degree, that figure is offset by the number of registered social landlord houses, but even that totals only around 20,000. Add the two figures together and we have a total of just 20,240 houses being built. When we left office in 1997, those two figures together amounted to 39,000 public sector houses. Now, only two thirds of that number of houses are being built in the public sector compared to when we left office.

Photo of Bob Russell Bob Russell Liberal Democrat, Colchester

In 1979, 75,500 local authority houses and 17,835 social registered landlord houses were built, so the total is 93,000. The situation was dramatically better therefore under the Conservatives in 1979 than it is now.

Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Shadow Spokesperson (Communities and Local Government)

I am grateful to the hon. Gentleman for clarifying that. I may have got the figure wrong in my opening remarks. In fact in 1953, about 300,000 council houses were built under the Conservative Government so, progressively, all Governments have been building fewer public sector houses. That is regrettable because the number of people on the list for that housing is, as the hon. Member for Ludlow suggested, growing at an alarming rate. The number of families who are homeless is officially 85,000, and according to Government figures the number of homeless people has risen alarmingly and now stands at 115,000. Unofficially, Shelter believes that the hidden homeless may push the figure of those who do not have a proper home of their own up to 400,000.

Those figures are shocking and the Government need to address them. How will they do so? The argument about who owns and who runs public sector housing is somewhat sterile. The important thing is that it is run properly and with reasonable rents. Will the Minister comment on the Government's progress in restructuring their proposals in this respect? It is important that housing is run so that it can be re-let quickly. I am glad to say that the old days of local authorities having vast banks of houses empty for months, if not years, are changing and improving. The audit requirements on local authorities have brought about some improvement in the management of council stock. Nevertheless, we can do better in re-letting our houses quickly.

What is the Minister doing to ensure that rent restructuring does not inhibit large-scale voluntary transfer? Housing specialists fear that keeping rent artificially low in the public sector makes it more difficult for LSVTs to get funding from the private sector. Indeed, the private sector has expressed considerable worries about existing funding of LSVT, which is based on a rental stream that now proves to be inadequate. That is a real problem. Does the Minister feel that artificially clawing back some of the money from LSVTs—for example, in Stroud—and redistributing it around the country is proving a disincentive for LSVTs? What does he think about the redistribution of housing revenue accounts? Could those two important subjects covered in the Local Government Bill be dealt with more transparently?

Mention has been made of the difference in management between registered social landlords and that that might be the reason why some registered social landlords are successful while others are not. The Government need to address that. For example, there is a stark contrast between the registered social landlord doing a superb job in Coventry and the failure of the Birmingham bid. The Birmingham bid failed because it was badly presented and too large; it covered about 75,000 houses, which is too big for one bid. The tenants were not being given a reasonable choice of landlord; they were being asked to swap one monolithic landlord for another.

The hon. Member for Stroud argued for more innovative methods of financing public sector housing. That is exactly what alternative vehicles such as LSVTs do. They release the discount inherent in the public sector housing stock. The LSVT enables registered social landlords to have much greater flexibility to borrow and to build new houses than councils have. Unless we change public expenditure rules, councils will not have that flexibility and the playing field will inevitably be skewed. The Conservative Government recognised that, which was why we invented alternative ownership vehicles for public sector housing.

The hon. Member for Stroud mentioned other public sector ownership vehicles, for example, ALMOs, which are growing in popularity. The Government are giving subsidies to them and perhaps the Minister will say something about that. There are other vehicles, such as private finance initiatives, and councils have the opportunity to lever in finance from the private sector through PFIs. Those are welcome initiatives because we all want to lever more resources into public sector housing from both the private and the public sector. By imaginative management of our housing stock, we can do all those things.

Much mention has been made this morning of the right to buy. The next Conservative Government will extend the right to buy to the registered landlord sector, but the critical difference is that we will insist that all resources are reinvested in building more houses. That is what ought to be happening in the council house sector, too. We should change the rules to insist that all moneys from right to buy are reinvested in building more social housing. That would go a long way to restoring the balance. I gather that at least one council has asked to be exempted from the Government's reduction in discounts for right to buy; perhaps the Minister will say whether that is so, and whether it is only one council or whether there are more, and whether any such councils will be granted exemption from the reduction in right to buy that the Deputy Prime Minister announced recently.

We have somehow to create more funds and we reckon that by extending the right to buy to the registered social landlord sector we can sell off up to a further 30,000 houses per year and build an additional 15,000 a year with the proceeds. When one considers that the number of social houses being built is only 20,000, it is clear that our policy would almost double the number at a stroke—and at no cost to the taxpayer. That seems a useful policy.

When one wants a house, it is not how many houses there are that matters, it is the availability. Most people are so pleased to be in a subsidised public house, because the rents are lower than the private sector, that the average tenancy varies between 10 and 20 years. In London, the average tenancy is 20 years. There are very few houses available in the public sector. If we build the extra numbers, availability will improve. It is all very well talking about those tenants that have subsidised public sector housing, but it is those who are not fortunate enough to have a house, those on a waiting list, who are among the most vulnerable in society, that we also need to consider. It is a shocking statistic that there is a record level of homelessness at the moment, and this and future Governments need to address that.

This has been an interesting debate. At times, it has revolved around a rather sterile argument about whether there should be council houses or not. Those who have subsidised housing in one form or another are not too worried about who owns it. They simply want it to be properly managed, so that when they have a complaint or a problem with their house, whether it is the responsibility of the registered social landlord or the council, the problem is dealt with properly. They want to live in a house that is well maintained, with rents at a reasonable level. As to all those who, in the 21st century, do not have houses, let us get on and build a few more for goodness' sake, particularly in the public sector, so that we can start to do something for those on waiting lists and can do something about the shocking matter of the record number of homeless people.

Photo of Tony McNulty Tony McNulty Parliamentary Under-Secretary, Office of the Deputy Prime Minister 10:43 am, 11th June 2003

I fear that I will not have time to dwell on many of the issues raised and there were some very thoughtful and personal contributions. I happily congratulate Bob Russell on securing the debate, but I deprecate totally the invective and absolute drivel that he came out with in most of the rest of his speech, which was not worthy of a serious issue that needs serious answers. How many answers did the hon. Gentleman give? Absolutely none, and I happily deprecate that. He certainly has rose-tinted glasses; everything was fine pre-Thatcher and everything went wrong as soon as she came to power. Again, that is absolute nonsense. If he had seen some of the scourges of the malfunctioning and dysfunctional private rented sector throughout the 1960s, he would not say that everything was fine prior to 1979.

The cruel fact is that since the war and certainly since the mid-1960s onwards, successive Governments have, through broad housing policy, let the nation down. My right hon. Friend the Deputy Prime Minister said that candidly and honestly and it is as true now as when he said it. The situation is not helped by minor third party invective that offers nothing.

The hon. Member for Colchester suggests that somehow stock transfer leads to deterioration in the condition of housing, but it achieves exactly the opposite. He rattled on and said nothing about something that many other colleagues happily dealt with—the state of the existing stock. If one believed the shallow invective of the hon. Gentleman, one would think that every council estate throughout the land is like the 1950s estate to which my hon. Friend Mr. Hurst referred. Would that they were.

I deal with housing regeneration and planning, for my sins, and I see the less than decent housing estates throughout the country, which are scars on the land. Not all that is the fault of the councils. I do not blame councils at all. To suggest that we have done nothing to redress the balance of that stock and nothing on homelessness is wrong. To suggest that the world of housing and investment has stood still for six years is wrong.

So, what were the hon. Gentleman's solutions? Solutions came there none, except this one: build more houses. Is not that radical? The hon. Gentleman offered nothing on the state of the current stock. By the way, there is nothing—not a jot—in the last Liberal Democrat shadow Budget about housing or how the resources would be provided for what the hon. Gentleman wants. I read such documents, however boring, in some detail. The hon. Gentleman offered nothing about the intricacies of and the interactions between the right to buy and new build that is only social sector; there was nothing about the availability of land, infrastructure or building skills capacity, nothing about how the one-club policy fits in with a national housing policy. Barely 20 per cent. of the entire stock in this country is in what might broadly be called the public or social sector; that must operate in the context of the other 80 per cent, but there was nothing on that. The hon. Gentleman suggested further that the private sector had nothing to offer.

I, like everyone else, know that the level of homelessness has increased. It has increased for various reasons, and I shall explain why. One of the first things that I did as a Minister was to take through a priority needs order on the back of the Homelessness Act 2002. That should have been secured earlier, but it was killed off by the Tories in the sweep up before the 2001 election. One of the first things that the Government did was get on the statute book a proper wide definition of what homelessness entailed and who the homeless were. We said candidly that that would mean significant rises in homelessness.

I am, in a sense, pleased that the figures went up; we can now identify whom the homeless are and do something about homelessness. Little brickbats saying homelessness has gone through the roof—it has in the official figures—are cheap political stunts. The resources are going in to deal with a real level of homelessness, rather than having to deal with an imaginary level, under which all kinds of people who should have been in that base of homelessness are eradicated by officialese. Their problems and those of their families do not go away, but if they are not recognised as homeless, some think they will somehow go away.

The hon. Gentleman says that the Labour Government have done nothing—on some other planet, not this one. In its first term this Government released £5.5 billion of capital receipts to local councils to start to redress the worst of the £19 billion backlog on social stock left by the Conservative Government. Some £12.1 billion of additional money has been spent on the social housing sector as a result of stock transfer. I agree with those hon. Members, including my hon. Friend the Member for Braintree, who made a thoughtful contribution, that it is a matter not of dogmatically asking who owns what but of creatively exploring new ideas.

What matters is that 760,000 dwellings will be brought up to a decent standard because of the transfer programme. If the next round is successful, 125,000 more will be brought up to scratch. That might not matter in the context of a silly little letter to the East Anglian Daily Times, but it does matter in the context of the proper development of a national housing policy for the country and the private sector. It matters that 360,000 dwellings will be brought up to a decent standard in the current round of the arm's-length management organisation programme, and 200,000 more will be once the new application round is implemented. Once decisions are made on the new round, nearly 1.5 million homes in the social sector will be brought up to a decent standard. According to the rose-tinted picture that some have painted, there are not 1.5 million homes of sub-decent standard in the social sector. Sadly, however, there are.

Both the processes that we are discussing, but particularly the ALMO programme, have led to far greater tenant empowerment, far greater tenant participation and far greater numbers of tenants determining their own futures, rather than having them determined by politicians. In that respect, it was a great pleasure to meet representatives of the National Federation of Arm's-length Management Organisations recently to discuss how we can push the envelope for that model further.

My hon. Friend the Member for Braintree mentioned in passing the suggestion of an interlocking housing policy for the whole housing sector. We have not been helped by the failure and dysfunction of the private rented sector, which was starkly evident in the 1960s and evident, too, in the 1980s and 1990s. That should be seen in the context of the right to buy—the one-club social model for moving from the social sector to home ownership—under which the social dwelling went with the tenant. That has proved entirely inappropriate and inefficient.

Let me give a stark illustration of the problem. Last year or the year before, 14,000 dwellings were built in London. About 3,000 were in the social sector, which is clearly not enough. However, in the same year, 11,000 were sold under the right to buy. The Reaganomics or voodoo economics behind the Tory proposals to extend the housing association will not work. It is a Conservative policy—with the emphasis on the "con".

If a registered social landlord has two houses in an area, at least half, if not all, the equity that is locked up in one of the houses will sustain the revenue stream that is used to pay the bank for both houses. If the landlord sells the houses, the bank will not say, "We know you sold them, but don't tell anyone, because the revenue stream and the debt repayments depend on it. Keep quiet, and we'll let you build another two houses."

The Tories are spending money three or four times over under a policy that was introduced as a gimmick for David Davis. It allowed him to jump up at the Conservative party conference and say, "You might have sacked me as Tory party chairman, but I'm still alive." That worked in terms of the coverage that he got, but as a substantive housing policy it is as bankrupt as the empty policy of the—

Photo of Tony McNulty Tony McNulty Parliamentary Under-Secretary, Office of the Deputy Prime Minister

I shall not, because I have too little time. If I have any time left at the end, however, I shall give way.

As I was saying, the Tory policy is as bankrupt as the empty policy of the hon. Member for Colchester, who made no suggestions as to what we might do.

I would love to go down the same road as my hon. Friend the Member for Braintree. As he so eloquently said—he happily admitted that this was not his phrase, although it still brought back happy memories—we cannot call back yesterday. I would love to do that, but we must think in substantive terms about how to deal with the real problems that exist now. I fully accept that they exist not only in London and the south-east, although those areas have particular problems. My hon. Friend is right that we must think of other models, and together with the Housing Corporation we have set up the low-cost home ownership taskforce under Brenda Dean to explore such models. We want to get to the stage where we can assist people and build on what we have done with the starter home initiative and other key worker initiatives. We want to assist people—key workers and others—into an affordability model for home ownership, without them taking the public or social sector unit with them.

I am keen to explore further the build-for-sale model that my hon. Friend Mr. Drew made a thoughtful contribution. It would be inappropriate for me to talk in detail about the live large-scale voluntary transfer process that is unfolding in Stroud, but I do not fully share his characterisation of many aspects of the LSVT process. Although he pulled back from the comment a tad and I partly know what he meant by it, it was patronising and unbecoming of him to suggest—or even to imply—that 18 months was a long time for the lovely people in council houses to endure and engage with such a process. When tenants get engaged and empowered through this process or ALMOs, and finally get some notion of having control over the future of their homes and communities, it is an enlivening experience.

I assure my hon. Friend that the LSVT process is now fair and honest and I do not endorse what he says about Defend Council Housing: like the hon. Member for Colchester, it is,

"full of sound and fury,

Signifying nothing" and offers no hope to council tenants.

Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Shadow Spokesperson (Communities and Local Government)

May I put the record straight and declare my interest as a fellow of the Royal Institution of Chartered Surveyors?

One of the crucial aspects of LSVTs is the Government's rent restructuring policy. Would the Minister say something about that? Are we going to get rents in the public sector of retail price index plus a half or plus one? What will that figure be, and what will be the effect of it on transfers?

Photo of Tony McNulty Tony McNulty Parliamentary Under-Secretary, Office of the Deputy Prime Minister

With the greatest respect, I will save any detailed comments on that. In three minutes, I am not going to do a little ditty and seminar on rent restructuring and the implications of that for the LSVT programme. If the hon. Gentleman writes to me about that or secures a debate, I will happily respond.

My hon. Friend the Member for Stroud was starting to think outside the more traditional boxes and trying to contemplate matters for his constituents, for which I am grateful because that is what we need. We do not need a sterile debate. Some people say, "Build more," and offer nothing in terms of an integrated housing or economic policy within which that policy can operate. It might be suggested that I was naive to expect a more detailed exposition of Liberal Democrat policy—we have never had that on anything much in the past 20 years so why should we get it this morning? Knockabout, and sterile suggestions that go nowhere, are inappropriate for what is a serious issue.

This is where we return to Mr. Clifton-Brown. As ever, he offers nothing apart from a voodoo economics right to buy extension. His party opposes the sustainable communities plan, which, with £22 million over three years, offers a significant difference in terms of step change. He opposes the right-to-buy changes, but every expert who is asked will say that, certainly in the London context, there are serious abuses of the right to buy and it has a seriously dysfunctional impact on the market.

I thought that I answered the hon. Gentleman's question about three months ago, but never mind. Two local authorities—Christchurch and Spelthorne—asked to be reviewed and excluded from the list and they were subsequently excluded because they had a case that stood up. A further 14 wanted to come in rather than leave, and they are being reviewed.

The hon. Gentleman opposed Labour's Budget and wants to extend our right to buy, which will not achieve anything and cut public expenditure. Just when, through the plan, we are trying to offer a way out—not least in Colchester and other areas of London and the south-east—we get facile and fatuous responses to the communities plan from the hon. Gentleman and his party, who run around like nimbys offering no alternative, and saying, "All we want to do is concrete over the south-east." What a wonderfully intellectual, substantive contribution to the housing debate that this county sorely needs that is. In truth, it offers absolutely nothing. Mr. Goodman even suggested yesterday that we were concreting over the south-east as part of a conspiracy to get conditions right to enter the euro.

Photo of Tony McNulty Tony McNulty Parliamentary Under-Secretary, Office of the Deputy Prime Minister

There we are—the hon. Gentleman says it himself, thereby showing clearly through his strangulated sedentary comments that he has as much to offer as the hon. Member for Colchester.

Photo of Mr John McWilliam Mr John McWilliam Labour, Blaydon

Order. Time is up. Hon. Members who do not wish to stay for the next debate should leave quickly and quietly please.